Laws Governing Banking & Insurance

ICICI BANK
INTRODUCTION
ICICI Bank is India's second-largest bank. The Bank has a network of about 573 branches and extension counters and over 2,000 ATMs. ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly-owned subsidiary. ICICI was formed in 1955 at the initiative of the World Bank, the Government of India and representatives of Indian industry. The objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses. In the 1990s, ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. In 2001, ICICI bank acquired Bank of Madura Limited. ICICI Bank set up its international banking group in fiscal 2002 to cater to the cross border needs of clients and leverage on its domestic banking strengths to offer products internationally. ICICI Bank currently has subsidiaries in the United Kingdom, Canada and Russia, branches in Singapore and Bahrain and representative offices in the United States, China, United Arab Emirates, Bangladesh and South Africa. Today, ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management.
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Laws Governing Banking & Insurance

ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).

BOARD OF DIRECTORS
N. Vaghul, Chairman K. V. Kamath, Managing Director & CEO Sridar Iyengar L. N. Mittal Narendra Murkumbi Anupam Puri Arun Ramanathan M. K. Sharma P. M. Sinha Marti G. Subrahmanyam T. S. Vijayan V. Prem Watsa Kalpana Morparia, Joint Managing Director (Up to May 31, 2007) Chanda D. Kochhar, Joint Managing Director & CFO Nachiket Mor, Deputy Managing Director (Up to October 18, 2007) V. Vaidyanathan, Executive Director Madhabi Puri Buch, Executive Director (w.e.f. June 1, 2007) Sonjoy Chatterjee, Executive Director (w.e.f. October 22, 2007)

Laws Governing Banking & Insurance

HISTORY
EARLY HISTORY
ICICI, then the Industrial Credit and Investment Corporation of India, was set up at a public limited company on January 5, 1995, by the Government of INDIA , with support from the World bank, to promote industrial development in India. Initially, the World Bank had considered the International Finance Corporation (IFC) for providing foreign exchange assistance to industrial concerns in India. However, the Indian Government felt that it was not proper to route foreign investments into the country through a Foreign Organization. Consequently, a private owned and operated development bank to finance expansion and modernization of private industry in the form of ICICI was launched. The main basic objectives were to: Assist in creation, expansion and modernization of enterprise; Encourage and promote the participation of private capital, both internal and external ; Take up the ownership of industrial investment ; Expand the investment markets. ICICIs scope of operations was later extended to include joint, public and cooperative sector projects. The initial authorized share capital of ICICI was 50 rupees mn. The major institutional shareholders were the UNIT TRUST OF INDIA (UTI), the LIFE INSURANCE CORPORATION OF INDIA (LIC) and the GENERAL INSURANCE CORPORATION OF INDIA (GIC) and its subsidiaries.

The equity of the corporation was supplemented by borrowings from the Government of India, the World Bank, the Development Loan Fund (now merged with the Agency for International Development), Kreditanstalt fir Wiederaufbau (an agency for Government of Germany), the UK government and the Industrial Development Bank of India (IDBI).

Laws Governing Banking & Insurance

On May 5, 2008, Mr. K. V. Kamath, MD&CEO was awarded the prestigious Padma Bhushan by the President of India

Laws Governing Banking & Insurance

REVERSE MERGER
Second largest Bank in India is now formally in place . RBI has given approval for the reverse merger of ICICI Ltd with its banking arm ICICI Bank. ICICI Bank with Rs 1 lakh crore asset base bank is second only to State Bank of India, which is well over Rs 3 lakh crore in size. RBI also cleared the merger of two ICICI subsidiaries, ICICI Personal Financial Services and ICICI Capital Services with ICICI Bank. The merger is effective from the appointed dated of March 30, 02, and the swap ratio has been fixed at two ICICI shares for one ICICI Bank share. Reserve Bank, approval is subject to the following conditions: (i) Compliance with Reserve Requirements The ICICI Bank Ltd. would comply with the Cash Reserve Requirements (under Section 42 of the Reserve Bank of India Act, 1934) and Statutory Liquidity Reserve Requirements (under Section 24 of the Banking Regulation Act, 1949) as applicable to banks on the net demand and time liabilities of the bank, inclusive of the liabilities pertaining to ICICI Ltd. from the date of merger. Consequently, ICICI Bank Ltd. would have to comply with the CRR/SLR computed accordingly and with reference to the position of Net Demand and Time Liabilities as required under existing instructions. (ii) Other Prudential Norms ICICI Bank Ltd. will continue to comply with all prudential requirements, guidelines and other instructions as applicable to banks concerning capital adequacy, asset classification, income recognition and provisioning, issued by the Reserve Bank from time to time on the entire portfolio of assets and liabilities of the bank after the merger. (iii) Conditions relating to Swap Ratio As the proposed merger is between a banking company and a financial institution, all matters connected with shareholding including the swap ratio, will be governed by the provisions of Companies Act, 1956, as provided. In case of any disputes, the legal provisions in the Companies Act and the decision of the Courts would apply.

(iv) Appointment of Directors

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Laws Governing Banking & Insurance The bank should ensure compliance with Section 20 of the Banking Regulation Act, 1949, concerning granting of loans to the companies in which directors of such companies are also directors. In respect of loans granted by ICICI Ltd. to companies having common directors, while it will not be legally necessary for ICICI Bank Ltd. to recall the loans already granted to such companies after the merger, it will not be open to the bank to grant any fresh loans and advances to such companies after merger. The prohibition will include any renewal or enhancement of existing loan facilities. The restriction contained in Section 20 of the Act ibid, does not make any distinction between professional directors and other directors and would apply to all directors. (v) Priority Sector Lending Considering that the advances of ICICI Ltd. were not subject to the requirement applicable to banks in respect of priority sector lending, the bank would, after merger, maintain an additional 10 per cent over and above the requirement of 40 per cent, i.e., a total of 50 per cent of the net bank credit on the residual portion of the bank's advances. This additional 10 per cent by way of priority sector advances will apply until such time as the aggregate priority sector advances reaches a level of 40 per cent of the total net bank credit of the bank. The Reserve Banks existing instructions on sub-targets under priority sector lending and eligibility of certain types of investments/funds for reckoning as priority sector advances would apply to the bank. (vi) Equity Exposure Ceiling of 5% The investments of ICICI Ltd. acquired by way of project finance as on the date of merger would be kept outside the exposure ceiling of 5 per cent of advances towards exposure to equity and equity linked instruments for a period of five years since these investments need to be continued to avoid any adverse effect on the viability or expansion of the project. The bank should, however, mark to market the above instruments and provide for any loss in their value in the manner prescribed for the investments of the bank. Any incremental accretion to the above project-finance category of equity investment will be reckoned within the 5 per cent ceiling for equity exposure for the bank.

(vii) Investments in Other Companies The bank should ensure that its investments in any of the companies in which ICICI Ltd. had investments prior to the merger are in compliance with Section 19 (2) of Banking Regulation Act, 1949, prohibiting holding of equity in excess of 30
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Laws Governing Banking & Insurance per cent of the paid-up share capital of the company concerned or 30 per cent of its own paid-up share capital and reserves, whichever is less. (viii) Subsidiaries (a) While taking over the subsidiaries of ICICI Ltd. after merger, the bank should ensure that the activities of the subsidiaries comply with the requirements of permissible activities to be undertaken by a bank under Section 6 of the Banking Regulation Act, 1949 and Section 19 (1) of the Act ibid. (b) The take over of certain subsidiaries presently owned by ICICI Ltd. by ICICI Bank Ltd. will be subject to approval, if necessary, by other regulatory agencies, viz., IRDA, SEBI, NHB, etc. (ix) Preference Share Capital Section 12 of the Banking Regulation Act, 1949 requires that capital of a banking company shall consist of ordinary shares only (except preference share issued before 1944). The inclusion of preference share capital of Rs. 350 crore (350 shares of Rs.1 crore each issued by ICICI Ltd. prior to merger), in the capital structure of the bank after merger is, therefore, subject to the exemption from the application of the above provision of Banking Regulation Act, 1949, granted by the Central Government in terms of Section 53 of the Act ibid for a period of five years. x) Valuation and Certification of the Assets of ICICI Ltd ICICI Bank Ltd. should ensure that fair valuation of the assets of the ICICI Ltd. is carried out by the statutory auditors to its satisfaction and that required provisioning requirements are duly carried out in the books of ICICI Ltd. before the accounts are merged. Certificates from statutory auditors should be obtained in this regard and kept on record.

Laws Governing Banking & Insurance

SERVICES OF ICICI BANK

1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 13)

Accepting deposits Lending loans Investments Insurance Dematerialization services Money transfers Wealth management Cards Loans Internet banking Mobile banking Tele banking ATM services

Laws Governing Banking & Insurance

INTERNET BANKING

Steps to Login
You would receive two pin mailers from ICICI Bank A) Internet Banking User id, B) Login password and Transaction password. Check that the pin mailers arrive in a sealed condition, else please contact our 24 hour Customer Care Centre. Key in the user id and password on the website and press LOGIN. After you request for a new password, the system would prompt for change in passwords. Your password must be at least 8 characters. We recommend you to change both transaction and login password. Passwords are case sensitive. Your internet banking account is locked in case of 3 wrong tries on entering user id and password. Always log out of ICICIBANK.COM when you have finished your activities.

ELIGIBILITY
This service is available to the following type of ICICI Bank account holders: Savings Account holders Credit Card holders Demat Account holders Loan Account holders
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Laws Governing Banking & Insurance

ONLINE SERVICES

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Laws Governing Banking & Insurance

FUTURE PLANS
Foreseeing Indian economy back on a high-growth trajectory in the coming months, ICICI Bank is looking at expanding its fund-generation profile and revenue streams to capitalise on the forthcoming opportunities. "Looking ahead, we see favourable prospects for the India n economy. . . India has weathered the global storm with a high degree of resilience and we expect the Indian economy to return to a robust growth path ahead of other economies that are experiencing recessionary conditions," ICICI Bank managing director and chief executive officer Chanda Kochhar has said. "As we prepare ourselves for the next phase of growth, we will work on further diversifying our funding profile and revenue streams," Kochhar said in her message to the country's largest private sector bank's shareholders in its annual report for 2008-09. Since 2007, as the global and Indian economic environment has changed rapidly, the bank has focused on a conscious strategy of capital conservation, risk containment and efficiency improvement. "We have healthy capital adequacy, sound liquidity and improved cost efficiencies," she added. The bank's chairman K V Kamath also expressed confidence that 'the Indian economy's robust fundamentals and domestic growth drivers will impart it the resilience to emerge stronger from this period'. "I believe the economic recovery, some signs of which are already visible, will gather momentum in the coming months and in due course see India returning to a high growth trajectory," he noted in his message to shareholders. Kamath, who handed over the role of MD and CEO to Kochhar last month, further said, "The last year has been an exceptionally challenging year for the global economy and financial sector. "India, while fundamentally in a much stronger position, has also experienced the impact of these events as they were transmitted through the trade and capital channels."
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Laws Governing Banking & Insurance Kochhar said that the against the backdrop of an imminent recovery in Indian economy, "The ICICI Group sees before it a wide opportunity spectrum: increasing household incomes and consumption in both rural and urban India; significant industrial and infrastructure investment potential; and the vast Indian diaspora spanning the globe. "We, as a multi specialist financial services group, are well positioned to capitalise on these opportunities. We will continue to participate in India's growth by meeting the financial services needs of the Indian economy." The annual report also quoted ICICI Bank's executive director Sonjoy Chatterjee as saying, "Indian economy has strong fundamentals and will provide robust growth opportunities for industry." "The Indian corporate sector has demonstrated its ability to withstand the global economic challenges and we will extend full support to the industry as it reorients strategies in this environment. We will focus on deepening our client relationships to enhance the diversity and resilience of our revenue streams," Chatterjee said. Kamath further said that ICICI Bank was able to meet the challenge posed by the developments in global economy 'due to its strong capital position and the fundamental strengths of its franchise.' "We have demonstrated our success over a long period of time. In fiscal 1985, we had a networth of Rs 1.75 billion, assets of about Rs 21 billion and profits of Rs 0.36 billion. In fiscal 2009, we had a networth of about Rs 500 billion, assets of about Rs 3,800 billion and profits of Rs 37.58 billion. This represents over 20 per cent compounded annual growth over a 24-year period. "Over the past few years, we have built a strong franchise in the Indian corporate and retail segments, the non-resident Indian segment, and the wider deposit market in certain countries. . .We believe that the strategy that we have followed and the franchise that we have built provide a strong foundation for our growth in the years to come," Kochhar said.

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